Can we charge GST to unregistered dealer?

There are certain goods & services which attract reverse charge. As per Sec 9(4) of CGST Act, if a registered person purchases goods/services from an unregistered dealer (URD) then the registered taxpayer is liable to pay GST on reverse charge basis( only for certain goods/services & registered persons).

Can I sale goods to unregistered dealer?

Yes, you can claim ITC even if you make a sale to an unregistered dealer as you will be charging him GST on the sale no matter he is registered or not. RCM is applicable if you make a purchase from an unregistered dealer. When you sale to inter state dealer, that dealer will bear GST and not you.

How do you show purchase from unregistered dealer in GST?

Record inward supplies from interstate unregistered dealers

1. Go to Gateway of Tally > Accounting Vouchers > Accounting Vouchers > F9: Purchase .
2. Select an interstate party ledger with Registration type as Unregistered .
3. Select a purchase ledger with:
4. Record the purchase invoice.

What is unregistered dealer in GST?

Persons whose aggregate turnover in a financial year does not exceed forty lakh rupees are not required to be registered with the GST authorities. Such persons are called unregistered vendors. Any purchases from unregistered vendors do not attract GST.

Can unregistered dealer issue Bill of supply?

Hence an unregistered person can not issue bill of supply, please see section 31(3)(c). A bill of supply is issued in cases when a registered person is a supplier of exempted goods/services, OR, if they have opted to pay GST under the composition scheme. It means a bill of supply with no GST charged therein.

When a Bill of supply can be issued?

When is a Bill of Supply issued? A bill of supply is usually issued when a business sells goods and services that are classified as exempt from GST. For example, a fruit vendor would not be issuing a regular Tax Invoice on sale but raise a Bill of Supply for his customers.

How do you deal with unregistered dealer in GST?

Purchases upto Rs. 5,000 per day from unregistered suppliers will not attract GST. In other words, there is a reverse charge on buying from unregistered dealers if you are dealing with unregistered suppliers and making payments above Rs. 5,000.

Can a a registered dealer purchase goods from an unregistered dealer?

A registered dealer can purchase goods from an interstate unregistered dealer but he (buyer) will pay IGST under reverse charge mechanism. Burden of compliance will lie on buyer. Under GST any person making interstate sale is required to get registered under GST.

What is the reverse charge of GST for an unregistered dealer?

In reverse, if unregistered dealer sells goods to registered dealer, then registered dealer has to pay GST to government directly through reverse charge mechanism. The invoice amount should be more than Rs 5000.

Do I have to issue a tax invoice to unregistered dealer?

Whether you supply materials to registered or unregistered dealer, you have to issue a tax invoice indicating payment of tax. Rule 1 (d) of GST – TAX INVOICE, CREDIT AND DEBIT NOTES – Final Rules 18-5-2017 stipulates that tax invoice issued shall indicate “name, address and GSTIN or UIN, if registered, of the recipient.”

What is the limit for inter-state purchase of goods?

If you are an unregistered dealer then there is no limit on inter state purchase. But if you are registered person and buying goods from an unregistered person (inter/intra state) then you will be liable to pay tax under reverse charge,even then there is no limit on inter state purchase.